Global Fundamental Analysis 17/06/2020

OPENING CALL: The Australian share market is expected to open higher. The Spi 200 contract to open 29 points up.


The Federal Reserve reported a moderate increase in May industrial production, including a pickup in manufacturing activity. A measure of builder confidence also improved.


U.S. shoppers opened their pocketbooks at malls and auto dealerships in May as states eased restrictions to contain the novel coronavirus, boosting retail spending and adding another sign the economy is recovering from earlier lockdowns to contain the pandemic. Retail sales, a measure of purchases at stores, at restaurants and online, increased a seasonally adjusted 17.7% in May from a month earlier, the Commerce Department said.


Overnight Summary




Australian Market

Australian shares surged 3.9% to 5942.3 as the U.S. Fed’s pledge of further support for financial markets propelled the S&P/ASX 200 to its best day in over two months. The ASX 200’s biggest percentage gain since April 6 ended a three-day losing streak.


US Market

U.S. stocks rallied on fresh data showing consumer spending rebounded in May, the latest sign that the worst of the economic shock from the pandemic may have passed. The S&P 500 gained roughly 1.9%, notching a third consecutive session of gains. The Dow Jones Industrial Average climbed about 2%. The Nasdaq Composite added about 1.8%. Retail sales rose 17.7% in May, according to data from the Commerce Department, marking a sharp bounceback from a record slump in March and April during the depths of the pandemic.



Gold futures settled higher, finding support after Federal Reserve Chairman Jerome Powell said that despite some upbeat U.S. economic data, uncertainty continues to surround the timing of a recovery.
August gold rose $9.30, or 0.5%, to settle at $1,736.50 an ounce on Comex, posting a gain for the first time in three sessions. Gold futures have been trading in a $1,670 to $1,770 range for about two months despite a sharp fall in the U.S. dollar against major currencies in that time.


Oil Futures

West Texas Iintermediate oil prices increased for a second consecutive day, closing up 3.4% at $38.38 a barrel as stocks on Wall Street rallied on strong U.S. retail sales data that could mean the country is on track toward recovery from coronavirus.
Prices were volatile, rising above $39 at one point before plunging toward $37 briefly on a report saying Beijing was shutting its schools again due to renewed covid outbreaks. But overall, groups like the IEA say reduced global production and economies generally on track toward recovery should slowly reduce an oil glut.




European Markets


Asian Markets

Earlier in the day in Asia, Japanese stocks broadly surged on hopes for continued easing by major central banks. The Bank of Japan maintained ultra-easy policies and showed further support for corporate financing. The Nikkei Stock Average rose 4.9% to 22582.21.
Mainland China stocks ended the session sharply higher as Asian markets broadly rebounded after the U.S. Fed announced a new round of stimulus overnight. The Trump administration also softened its tone in terms of restrictions on Huawei,
which analysts say may trigger buying interest for Chinese tech-hardware stocks. The benchmark Shanghai Composite rose 1.4%, the largest one-day gain in over two weeks, to settle at 2931.75.

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